Tammany Fall

By

When Tom DeLay became majority whip in January 1995, he and Grover
Norquist, the president of Americans for Tax Reform, initiated the K
Street Project, a plan to force lobbyists to hire only Republicans
and raise money only for Republican candidates. It was based on the
assumption that, by monopolizing political contributions from
business, Republicans could preserve the congressional majority
they had just won. But DeLay had his own stake in the project. By
controlling the flow of these contributions, he could enhance his
own power within the party. That, after all, was how he had defeated
Robert Walker, Speaker Newt Gingrich's candidate for whip--by
raising and dispensing over $2 million during the fall election to
Republican House candidates.As a first step in tightening ties between corporate America and the
Republican Congress, DeLay convened a meeting of lobbyists in early
1995 to write legislation that would freeze new government
regulations on business. DeLay's success that year in getting the
House to adopt this legislation and in waylaying the Clinton
administration's ergonomics regulations cemented his ties to a
group of lobbyists who would become his "kitchen cabinet."

Then, in 1998, as he was assuming de facto control of the House from
an embattled Gingrich, DeLay began to threaten firms and trade
associations that refused to replace Democratic staffers with
Republicans. When the Electronic Industries Association hired
former Democratic Representative Dave McCurdy as its president,
DeLay held up copyright legislation it had lobbied for. And, in the
spring of 1999, after a court ruled against Microsoft in an
antitrust suit, DeLay let Microsoft know that, if it wanted
Republican support, it should hire Republican lobbyists and fund
Republican candidates. Recalls one high-tech lobbyist, "The [GOP]
leadership was pretty much saying that, if we are going to bail you
out, what are you giving to those [Democratic] guys for?"

The pressure worked. Although the Electronic Industries Association
retained McCurdy, it made him a figurehead and put the actual
lobbying work into the hands of two conservative Republicans.
Microsoft began hiring Republicans and giving the bulk of its
contributions to Republicans, including DeLay. (During the 2004
election cycle, for instance, Microsoft gave DeLay's PAC the
maximum of $10,000.) By the late '90s, lobbying firms and trade
associations were coming to DeLay's office to have their new hires
cleared.

That's when DeLay took the K Street Project one step further. He
didn't just get lobbying firms to hire Republicans; he got them to
hire his former staff. Through these staffers, DeLay created a
network of lobbyists, political consultants, and conservative
activists who did his bidding. The ex-staffers on K Street didn't
act like conventional lobbyists, who represent the interests of
their clients. When DeLay staffers left his office for K Street,
they continued to represent his interests as well as those of their
clients. They would tell businesses how to please DeLay--and that
meant funding him and his political operations. And, in addition,
they would aid and oversee the organizations that he was developing
to enhance his power. The result was the rise of a political
machine reminiscent of New York's Boss Tweed or Mississippi's
Theodore Bilbo.

That machine is one reason DeLay, now the majority leader, has
continued to amass power over the last decade. With its assistance,
he has raised much more money than any other House member, ensuring
loyalty and obedience from his fellow Republicans. But DeLay's
relentless drive to power has created a continuing temptation to
sell votes, exceed campaign funding limits, and cloak greed in the
guise of charity or education. DeLay, like Tweed and Bilbo, has
repeatedly succumbed to this temptation to bend the law. That's why,
as clouds of scandal gather over DeLay's office, the same political
machinations that contributed to his rise to power may finally lead
to his downfall.

Since 1984, DeLay has employed about 300 people in his congressional
and leadership offices and about 75 more on his campaigns and at
his political and charitable organizations, including Americans for
a Republican Majority Political Action Committee (armpac) and the
DeLay Foundation for Kids. Working for DeLay was a plum assignment
for ambitious conservatives, but many left after three or four
years, with DeLay's blessing, to become lobbyists and political
operatives.

Indeed, lobbying firms competed intensely for top DeLay staffers.
Says one high-level Republican lobbyist for a trade association,
"There is always a premium for people coming from [the
congressional] leadership, and DeLay has run a tighter ship, so
that has put a premium on contacts with people who serve in his
office." After the lobbying firm Williams %amp% Jensen landed
former DeLay Chief of Staff Susan Hirschmann in 2002, National
Journal termed it "the biggest hiring coup of the year."

Since the late '90s, 29 DeLay alumni have acquired major lobbying
positions on K Street. (That dwarfs any other leadership office.
Speaker Dennis Hastert, for instance, has six former staffers on K
Street.) Together, they represent around 350 firms and
institutions, including the bulk of the country's energy firms, the
giants of the finance and technology sectors, the airlines, the
auto manufacturers, the tobacco companies, and the country's
largest health care and pharmaceutical companies. Former DeLay
staffers also represent 13 of the biggest trade associations,
including the American Petroleum Institute, the Pharmaceutical
Research and Manufacturers Association, and the Information
Technology Industry Council. Microsoft, for instance, has retained a
host of DeLay alumni, including nine lobbyists from the Alexander
Strategy Group, which former DeLay Chief of Staff Ed Buckham
founded in 1998 with a huge initial contract that DeLay secured
from Enron. (The group also paid DeLay's wife a salary for several
years.)

A few former staffers went to work for other House members or
senators before leaving for K Street and are more clearly
identified with them than DeLay. But most DeLay alumni trumpet
their association with the majority leader. The Alexander Strategy
Group's website sports a quotation from "Ed Buckham, partner,
former chief of staff, Majority Leader Tom DeLay." The former
staffers call themselves "Team DeLay," and, after DeLay's
legislative director, Drew Maloney, quit to join the Federalist
Group in 2002, he convened a meeting of ex- staffers every six
weeks. One attendee, former Deputy Chief of Staff Tony Rudy, who is
now with the Alexander Strategy Group, told National Journal, "There
is a lot of discussion about how we can help Republican candidates
and expand the majority." As for DeLay, Rudy added, "As long as he
wants me, I'll be there for him." (DeLay, as well as Buckham and
Rudy, did not respond to interview requests for this story, and
former staffers who were interviewed insisted on not being
quoted.)

DeLay's former staffers have also migrated to conservative
Republican organizations. These include several high-powered
communications firms. Former Press Secretary Michael Scanlon heads
Capital Campaign Strategies, which is known as the partner of
former lobbyist and DeLay crony Jack Abramoff in bilking American
Indian tribes. Former DeLay Director of Communications Jonathan
Baron's Red Sea LLC handles polling and media relations for armpac,
Republican candidates, and the Club for Growth. DeLay alumni also
occupy key positions in the Christian Coalition, the International
Republican Institute, the National Right to Life Committee, the
Home School Legal Defense Association, the Traditional Values
Coalition, and Concerned Women for America.

DeLay has alumni throughout the Bush administration, including the
White House and the Commerce, Justice, and State Departments, too.
In January 2004, after reaching an antitrust agreement with
Microsoft on its browser, Internet Explorer, the Justice Department
appointed Patricia Brink, who had served for ten years as DeLay's
press secretary, to oversee Microsoft's compliance. Asked whether
the appointment could reflect DeLay's influence, one lobbyist
commented, "I think that was a significant choice."

In the House, DeLay pushed Hastert, who had been his deputy whip,
into becoming speaker in 1998 and nominated Missouri Representative
Roy Blunt to succeed him as whip when he became majority leader in
2000. Many of their key staff are DeLay alumni, including Hastert's
director of operations and Blunt's deputy chief of staff and
director of floor operations. DeLay also has staffers in high
positions in at least eight other House offices, including that of
Republican John Boehner, who, along with Blunt, is often mentioned
as a possible successor to DeLay.

These connections--and lobbying ties in particular--have allowed
DeLay to dominate the relationship between K Street and the
Republican Party. When pharmaceutical companies wanted a
prescription-drug bill in 2003 that would not force them to bargain
with the government over prices or to compete with imported drugs,
they worked through a broad coalition organized by Hirschmann. The
pharmaceutical companies also hired five other former DeLay staffers
to lobby, including three from Buckham's Alexander Strategy Group.
When energy firms wanted to pass a provision that would
retroactively limit liability for manufacturers of mtbe, a toxic
gasoline additive, they hired Maloney. And, when tobacco companies
wanted to keep the Food and Drug Administration from regulating
their industry, they looked to former DeLay staffer Karl Gallant at
the Alexander Strategy Group.

DeLay almost invariably came through for these lobbyists and their
clients, badgering and even allegedly attempting to bribe
Republicans who didn't want to back the budget-busting
prescription-drug bill, blocking the Bush administration's energy
bill because the Senate version didn't limit mtbe liability, and
killing a provision in a tobacco bill that would have permitted FDA
regulation. His success redounded in fund-raising receipts. During
the 2004 election cycle, two tobacco companies, R. J. Reynolds and
Brown and Williamson, gave the maximum $10,000 contributions to
DeLay's PAC. Energy companies contributed $143,425 and
pharmaceutical companies $106,000 to DeLay's reelection campaign in
the cycle.; Of all DeLay's ventures, the one that has gotten him in
the most trouble is Texans for a Republican Majority.

But DeLay's former staffers not only raised money for his
campaigns--all lobbyists have their clients give money to
politicians they want to influence-- they also helped fund and
staff his PACs and a succession of shadowy groups that intended to
advance DeLay's personal agenda and preserve his power in the
House. These efforts have proved enormously remunerative, but they
have also contributed to the scandals and investigations that have
dogged him.

The heart of DeLay's fund-raising has always been armpac, which he
founded before the 1994 election to buy support from fellow
Republicans. Initially overshadowed by Newt Gingrich's gopac, it
became the leading House Republican PAC after Gingrich resigned.
Its directors have played musical chairs between DeLay's offices
and the Alexander Strategy Group, to which, at one point, armpac
paid rent. After DeLay became majority whip, he recruited tobacco
lobbyist Gallant to head it. Gallant was succeeded in late 1997 by
Buckham, who also set up the Alexander Strategy Group, where
Gallant went to work. In 1999, Jim Ellis, who worked for the
Alexander Strategy Group, succeeded Buckham as armpac's director.
Buckham and Ellis (along with Abramoff and later Hirschmann) became
DeLay's principal political advisers.

ARMPAC was wildly successful. From 1998 to 2004, it raised $14.3
million, which it dispensed to the National Republican
Congressional Committee (nrcc) and Republican House members. But
DeLay was never satisfied with armpac, which had to disclose its
contributors and limit the size of their hard money contributions.
So, after the 1998 election, DeLay, Buckham, Ellis, and Gallant set
up three dubious fund-raising vehicles: the U.S. Family Network
(usfn), Americans for Economic Growth (AEG), and the Republican
Majority Issues Committee (rmic). Usfn and AEG were registered as
tax-exempt "social welfare" organizations that didn't have to
report their contributors but did have to devote the bulk of their
time to nonpolitical activities. The rmic could participate in
politics but couldn't back specific candidates. All of these
organizations were supposed to be independent of DeLay, but DeLay's
lieutenants ran them on his behalf. Usfn, run by DeLay's former
campaign manager, Robert Mills, seemed designed to subsidize
DeLay's political operations and Buckham's lobbying. It raised over
$1 million from five donors, which it used to purchase a
Washington, D.C., townhouse for armpac and the Alexander Strategy
Group and a 15-year lease on an MCI Center skybox (presumably to
entertain clients and donors). In 1999, the nrcc--whose chairman,
Representative Tom Davis, owed his position to DeLay's support, and
which hired Buckham as a consultant--sent the usfn $500,000, most
of which it funneled to AEG for ads in congressional races. The FEC
later ruled that the nrcc was trying to avoid rules on the use of
corporate money by laundering it through the two organizations and
fined it $280,000.

DeLay shut down usfn and AEG after the 2000 election and rmic soon
afterward. But he wasn't finished with questionable ventures. After
the 2002 congressional election, when new campaign finance rules
took effect barring members of Congress from raising soft money,
DeLay's hand could be seen in the establishment of the Leadership
Forum, chaired by Hirschmann and launched with a $1 million grant
from the nrcc. And, on the eve of the Republican convention last
August, DeLay established a "charity," Celebrations for Children,
which planned to use the money it raised to entertain lobbyists and
politicians at the convention.

But, of all DeLay's ventures, the one that has gotten him in the
most trouble is Texans for a Republican Majority (trmpac). In
September 2001, DeLay and Ellis established trmpac to help
Republican candidates win control of Texas's House of
Representatives in the 2002 elections, so that they could vote for
a new congressional redistricting plan that was aimed at replacing
seven Democratic incumbents with Republicans. Trmpac raised $1.6
million for Republican statehouse candidates, but at least $600,000
of trmpac's funds came from corporations. That's against Texas law,
which forbids corporations and unions from funding state campaigns.
Last September, a grand jury in Travis County indicted Ellis and
two co-workers, John Colyandro and Warren Robold (who came from
armpac).

DeLay denies that he had any knowledge of trmpac's fund-raising, but
the entire operation was geared toward attracting his donors.
Trmpac's fund-raisers went after not only Texas companies, but also
firms like Kansas City- based Westar Energy Corporation, which
didn't have any special business in Texas but wanted to buy favors
from the majority leader. And DeLay's former staffers from K Street
were brought in to involve DeLay in the fund-raising.

One of these ex-staffers was Drew Maloney of the Federalist Group.
In June 2002, Maloney organized a joint armpac/trmpac golf
fund-raiser featuring DeLay at the Homestead Resort in Virginia. It
included several energy companies interested in limiting mtbe
liability and Westar, which wanted a special exemption from public
utility laws. In an e-mail to another former staffer, Chris
Perkins, who was working for armpac, Maloney explained that Westar
was giving $25,000 to trmpac on the understanding DeLay would
champion its legislation. And, after reportedly asking Westar
executives what they wanted, DeLay did so. DeLay later drew an
admonishment from the House Ethics Committee for appearing to sell
his vote to Westar.

As the Travis County case and a civil suit by former Democratic
Representative Chris Bell, a victim of DeLay's gerrymandering, have
proceeded, e-mails have surfaced linking DeLay directly to trmpac
through his ex-staffers. In one e-mail, Maloney told Robold that he
had two checks from Reliant Energy that he would give to DeLay to
convey to trmpac. "Will deliver to T.D. next week probably,"
Maloney wrote. In another, Robold asked Colyandro to draw up a list
of the top ten potential givers. "I would then decide from response
who Tom DeLay others [sic] should call," Robold wrote. These and
other e-mails could provide the basis for indicting DeLay. At the
least, they add further detail to the picture of DeLay as an
accessory to corruption.

DeLay has, of course, been dodging investigators and civil suits
since 1999 without any apparent reduction in his power. Up until
this year, his notable successes--for instance, winning the
Republicans six additional House seats from Texas--increased his
clout. But DeLay's accumulation of misdeeds, most of which grew out
of his attempt to create a political machine that would put
lobbyists and their clients at his service, may have finally stalled
his drive to power. Facing a panoply of ethics charges, DeLay's
influence has begun to wane.

In the face of new charges against Delay, the House voted earlier
this year to repeal the changes in ethics rules that were adopted
last November at DeLay's behest--and which would have allowed him
to keep his leadership position even if indicted in Texas. DeLay
also failed to block a bill relaxing government rules on funding
stem-cell research. Says one influential Republican lobbyist, "You
would not think that, if he were at the height of his powers, the
stem-cell bill would have passed." Only a handful of DeLay's
colleagues showed up at a tribute that the American Conservative
Union held for him in Washington on May 12. And Republicans, who
once coveted DeLay's backing, are now worried about suffering from
a "DeLay factor" in November 2006.

Social conservatives like Paul Weyrich and James Dobson of Focus on
the Family have stood solidly behind him, but other conservatives
have begun to waver. The Wall Street Journal's editorial page has
criticized DeLay for ethical lapses. And even his closest
conservative allies are distancing themselves. Norquist, while
insisting that DeLay has not been weakened by the scandal, tried to
dissociate DeLay from the K Street Project. "Not to be critical of
DeLay," Norquist says, "but this is an outside project where we
have raised the importance of hiring people who understand
economics." Norquist showed up briefly at the tribute to DeLay but
left before the dinner and the speeches.

There has also been a sharp falloff in DeLay's fundraising.
Contributions to his legal defense fund have plummeted, even as
DeLay's legal expenses have mounted. In the last quarter of 2004,
DeLay raised $254,250. In the first quarter of this year, he raised
only $47,750. Contributions to armpac may also be falling off. In
its FEC filing for the first months of this year, armpac listed
$386,252 in contributions. In a comparable filing for the first
four months of 2003 (also at the beginning of an election cycle),
armpac listed $446, 223 in contributions. (According to FEC
records, DeLay also loaned his congressional campaign $100,000 this
spring.)

DeLay could still rebound, or he could be forced out as Gingrich
was, allowing Blunt, who is being groomed as his successor, to take
up where he left off. But, in the growing public disquiet with
congressional corruption--which is reminiscent of the early
'90s--there are clear warning signs to DeLay and to Republicans. In
trying to introduce the kind of political machine most commonly
found in postbellum Mississippi or Tammany New York City, DeLay may
have damaged not only his career, but also the Republicans' grip on
Washington.

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